US Justice Department Indicts KuCoin for Anti-Money Laundering Violations

The Department of Justice (DOJ) has filed charges against cryptocurrency exchange KuCoin and two of its founders, Chun Gan and Ke Tang, for allegedly violating anti-money laundering laws. The indictment claims that KuCoin operated as an unlicensed money transmitter, failed to implement adequate AML measures, and deliberately avoided U.S. regulations by concealing its substantial U.S. customer base. The exchange allegedly laundered over $9 billion, facilitating criminal activity through its platform.

Justice Department Charges KuCoin With Anti-Money Laundering Violations

The United States Department of Justice (DOJ) has filed criminal charges against KuCoin, a cryptocurrency exchange, and two of its founders, Chun Gan and Ke Tang, for allegedly violating anti-money laundering (AML) laws.

According to the indictment, unsealed Tuesday, KuCoin operated an unlicensed money-transmitting business and violated the Bank Secrecy Act. The DOJ alleges that the exchange failed to maintain an adequate AML program, violated customer identification and verification procedures, and neglected to file suspicious activity reports.

Prosecutors claim that KuCoin intentionally circumvented U.S. AML and know-your-customer (KYC) regulations by falsely claiming to have no U.S. customers, despite having a substantial customer base in the United States. The government alleges that KuCoin facilitated the laundering of over $9 billion through its platform.

"KuCoin allegedly took advantage of its sizeable U.S. customer base to become one of the world's largest cryptocurrency derivatives and spot exchanges, with billions of dollars of daily trades and trillions of dollars of annual trade volume," said Damian Williams, U.S. Attorney for the Southern District of New York. "Financial institutions like KuCoin that benefit from operating in the United States must comply with U.S. law to combat crime and illicit financing."

The Commodity Futures Trading Commission (CFTC) has also filed a parallel civil action against KuCoin. The DOJ's charges include operating an unregistered futures commission merchant, failing to maintain sufficient risk management controls, and making false and misleading statements to U.S. regulators.

If convicted, the defendants face significant penalties, including fines and imprisonment. The charges highlight the growing scrutiny of cryptocurrency exchanges by U.S. authorities as they seek to prevent illicit activity in the digital asset market.